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Economies all over the world have been factually struggling to recover from the severe impact of the spread of Coronavirus. The construction sector in the Middle East was among the most affected by this global crisis.
Nonetheless, with numerous people in the region receiving vaccines and several countries resuming semi-normal life conditions, experts predict that the building sector is on the right path towards achieving the required revival by the end of 2021 and the beginning of 2022. There are, however, several challenges that have to be taken into consideration.
According to Global Data, the growth of the building sector in the Middle East and Africa decreased by 4.5% in 2020 and the sector partly recovered with a growth rate of 1.9% in 2021 and then a predicted rate of 4.1% in 2022.
Recovery expectations
If we take the Emirati market as an example, the building sector declined by 4%, according to the recorded annual data in 2020, and experts expected a growth of 3% to 4% in 2021. This is because of the execution of newly adopted building laws that would pave the way to support the building and construction activities in the country.
Building and construction experts in other countries in the Middle East as well expect the sector to grow and prosper in the coming year. Eng. Mamdouh El Morshedy, Member of the Board of Directors of the Egyptian Federation for Construction & Building Contractors, said that the Egyptian construction sector witnessed the injection of around 400 billion EGP in 2021. He also noted that it is expected that these investments would increase by 100 billion EGP in 2022, to reach 500 billion EGP.
According to the Middle East and Africa Construction Industry Report, Q1 2021 Updates - ResearchAndMarkets.com, “The onset of the coronavirus and subsequent decline in the oil prices had a negative impact on the construction sector. Although construction activities were affected, the work continued but with reduced productivity while keeping social distancing norms in mind. However, the sector is expected to recover in 2021 with various upcoming construction projects across the Middle East.”
Adapt to grow
International research institutes predict further development of the building sector in the Middle East and in Africa in the coming years as well. Business Wire noted that the building sector in the Middle East and Africa will witness an annual growth of 7.1% by 2024. The main concern is the delayed delivery schedules due to the spread of Coronavirus. However, the building sector would have to adapt to the new conditions in order to continue working on various projects.
There are some challenges; nevertheless, the sector has to deal with in order to achieve the desired growth. Among the most important problems is the increase of the prices of various building materials. This affects the profit margin of construction companies and results in delays in scheduled deliveries. Nevertheless, building materials’ producers started putting this issue into consideration and began providing products that are featured with the highest standards of quality with competitive prices.
Other challenges include the lack of skillful workers. Due to the spread of Coronavirus in 2020, a large number of construction workers had to leave the Middle East and return to their homelands. These professions include civil engineers, technicians, architects, and construction workers. Several countries in the Middle East started decreasing travel restrictions and a large number of workers are expected to return to their work once again during the coming period.
In order to attract workers and employees in the construction sector, companies have to abide by the regulations of the Occupational Safety and Health Administration, OSHA, and other procedures to guarantee the safety of workers in building sites.
Overcoming challenges
There are also the challenges imposed by the tendency towards achieving sustainability and decreasing emissions. According to the World Green Building Council, the building sector is responsible for 39% of the emissions all over the world. Construction corporations should begin taking tangible steps towards obtaining the LEED certificate.
They also have to begin considering the construction of buildings that saves energy and resources, and provide a healthy lifestyle for residents. Many initiatives around the world aim to achieve zero carbon emission by 2050. Construction companies will surely play an important role in accomplishing this objective.
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Mr. Safdar Badami
Managing Director
Al Muqarram
© Press Release 2021
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